Republicans are seriously considering a Doomsday Plan if fiscal cliff talks collapse entirely. It’s quite simple: House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more: no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes. Congress would recess for the holidays and the president would face a big battle early in the year over the debt ceiling.

Two senior Republican elected officials tell me this doomsday plan is becoming the most likely scenario. A top GOP House leadership aide confirms the plan is under consideration, but says Speaker Boehner has made no decision on whether to pursue it.

Under one variation of this Doomsday Plan, House Republicans would allow a vote on extending only the middle class tax cuts and Republicans, to express disapproval at the failure to extend all tax cuts, would vote “present” on the bill, allowing it to pass entirely on Democratic votes.

By doing this, Republicans avoid taking blame for tax increases on 98 percent of income tax payers. As one senior Republican in Congress told me, “You don’t take a hostage you aren’t willing to shoot.” Republicans aren’t willing to kill the middle class tax cuts, even if extending them alone will make it harder to later extend tax cuts on the wealthy.

Maybe if they try really hard, they can earn us another credit downgrade.

Somehow Republicans think they have power when they shriek like children. OK, so the MSM will act like Republicans have a point when they throw tantrums but the MSM is more full of idiots and morans than they aren’t.

There will be no agreement in December. There may be one in January after the bush43 tax cuts end. I hope they just end and I will happily pay the extra money just to get NPR and the deficit scolds to shut the hell up.

If they go through with that, I’d say the appropriate response would be for Obama to tell them that he regards the debt ceiling to be in violation of the 14th Amendment, and will advise his Treasury Secretary to disregard it from now on.

Sure, it’s an iffy claim re the debt ceiling’s constitutionality, but what can Boehner actually DO about it?

Right after the 2010 midterms, Boehner said something like, “well, in our system it’s the president’s job to come up with policy proposals” or something like that. The idea being, “no, we don’t have any ideas, we just want to cry and rave and bark and say ‘no’ to everything”.

And he can’t really propose any reasonable or intelligent policies– he’ll get knifed by Cantor (or whoever), who will say that Boehner was raising taxes, or acquiescing to Obama Kenyan Muslim Socialism or whatever. Some people think that in Boehner’s heart of hearts he’d like to speak and behave rationally, but he’s constrained by the party he leads. I don’t really care much; the end result is what it is, regardless of what he secretly thinks.

Ex-Republican Bruce Bartlett wrote in the summer of 2010 that today’s GOP is ”the greedy, sociopathic party” driven by an “ambition to retake power so that they can reward their lobbyist friends with more give-aways from the public purse.” It’s hard to see what if anything else they care about.

“Glad to see you, Speaker. I’ll get right to the point. As President, my job is to protect Americans from all enemies, both foreign (pause) and domestic. I will stop at nothing to fulfill that obligation. I know you understand this, but some people don’t. Please explain it to them.

Unless I am mistaken, if the tax cuts on the wealthy expire and aren’t renewed, and the sequestration takes place, doesn’t that totally alter the debt ceiling situation, as revenue increases substantially and spending drops. So where do the Republicans win?

Unless I am mistaken, if the tax cuts on the wealthy expire and aren’t renewed, and the sequestration takes place, doesn’t that totally alter the debt ceiling situation, as revenue increase substantially and spending drops. So where do the Republcians win?

I think that’s so, but I don’t know how the revenue from the tax increases and the reduced outlays from the cuts align in time with existing spending and bond maturities.

Why does anyone think a Republican House member will work with or agree to anything from this White House? We’ve got plenty of evidence they will light themselves on fire before they work with Obama or anything to do with him. Why is this different? Because Obama just won big? Because the nation clearly wants to see it? Pshaw! Repuglicans serve a Higher Purpose: Republican Jesus will see you all ground into dust.

I’d love to hear the screaming from the DoD, and the “beltway bandits” that feed off them, when $500 billion is chopped from their favorite government agency’s budget, putting over 100,000 employees into unemployment.

Call their bluff, Dems!

Oh, and increase the tax on the top 2% to Reagan’s 50% on incomes above $250K, just to eff with them.

They think the debt ceiling is a winning issue for them? I mean it looks nice in an attack ad for 2014, but it wasn’t terribly effective in 2012. So the plan is to give the middle class tax cuts and let the Democrats be on record as passing the bill? And this can give us another year of putting off the cuts? So they can grandstand about not paying their debts next year. The GOOP has done everything possible to that poor chicken and are now pretending to be dead to get the buzzards down for a jolly rogering. Congress is being run by a 3rd grade Special Ed room. Holy hell!

I’m going to be very pissed if all this eleventy dimension chess between Obama and Republican idiots costs me my job. I was already out of work for 7 months in 2011. All those roads & bridges aren’t getting any younger. Of course, if they do pass something for fixing the Sandy-ravaged East Coast, then I may be okay…

Also, I don’t get how passing the middle class extensions would raise taxes on 98% of people. The expiring FISA tax holiday will mean another 2% in taxes for almost everyone, but I didn’t think that was part of the discussion anyway.

So, Obama gets the tax policy he wants, the sequester hits (some domestic cuts will hurt people who are used to it and the defense cuts will make contractors writhe in intense pain, agony and shame) and the debt limit doesn’t get raised, guaranteeing another crack at solving the problem in a month or two.

I don’t see why the GOP would want to negotiate the debt ceiling away until they had to. It really doesn’t make any sense for them to give up their only actual hostage, since they weren’t going to do away with the tax cuts for everyone (even if they’d bitch and moan about the “Job Creators” who will still get a tax cut on their first quarter million of taxable income.)

If Obama just lets them default, would that destroy the GOP? I’d like to think so. Obama telling all the soldiers overseas that the GOP-controlled House is the reason they aren’t getting paid. Obama telling all the seniors that their Social Security checks will be smaller for a while. Obama telling all the workers on highway projects to go home because Boehner won’t allow them to be paid. Obama telling the country why those assholes are unwilling to approve payment on the spending they voted for.

Aside from the human cost, it would be a great political moment. I say make them sweat. They’ll cave. There will be a downgrade because the credit folk are ninnies who want to blame the black guy rather than the moneyed interests, but if they want to fuck us they already have.

I believe the Republicans thought is to take the middle class cuts out of the conversation by passing them, then, when Obama wants to raise the debt ceiling and take care of some of the cuts, Republicans will go “We won’t pass any of this unless you accept tax cuts for the rich.”

This reminds me of a long forgotten Woody Allen essay on the Earl of Sandwich, working feverishly into the night on his invention. First he puts two slices of bread beneath some meat, then three slices of meat with no bread, then one slice of meat beneath two slices of bread. It takes him months of hard work and brainstorming to eventually get to the sandwich as we know it. Or maybe it reminds me of a MOnty Python routine in which the gentlemen of the road fall to arguing about exactly how a robbery works: do they threaten the victim and then give him their money?

Do the Republicans have the faintest idea what leverage is,and how it works?

@jrg: It’s awkwardly worded. What the article means to say is: in the “doomsday” plan, Rs refrain from blocking the middle-class extension. Therefore (in the article’s reasoning), they can’t be “blamed” for letting the middle class tax cuts expire (and taxes going up on the middle class), because they won’t have expired.

This seems (a) like terrible reasoning – as others have said, this strategy in no way prevents dems from saying that Rs voting ‘present’ “refused to support” tax cuts for the middle class, and (b) to change the current situation from fiscal cliff to fiscal cliff + middle class extension, which looks to me like a total loss for team crazy. I guess they’d rather fight the debt limit battle than the tax battle, but I’m not sure that’s any better for them.

Maybe if they try really hard, they can earn us another credit downgrade.

I half hope that Obama might put on his Constitutional Law Professor hat on for just long enough to tell Congress where they can put their ‘debt ceiling’.

IMO, Congress gives implicit consent for spending that money when they pass a new budget. This debt ceiling BS is roughly like having a crazed spouse or roommate agree to put a new fridge on the credit card bill, then reneging on it the next month when the credit card bill comes due.

Too late. We bought the fridge. And here’s your signature on the receipt, right next to mine. So STFU.

Sure, it’s an iffy claim re the debt ceiling’s constitutionality, but what can Boehner actually DO about it?

Articles of impeachment, which would presumably have Bullshitico and the rest of the Village media polishing his Boehner because it keeps them in content throughout the year. (And would also make any kind of legislation over the next two years a non-starter.)

And yeah, impeachment backfired on Newty’s gang, but they didn’t have the tight gerrymander that allowed the GOP to retain a House majority while getting fewer overall votes than Democrats.

I love the part where they want to hold the debt ceiling hostage, thus reminding everyone that they’re trying to renege on the deal they cut the last time they did it. Oh, and that they’re infantile assholes.

I thought congress’s sole power on the debt ceiling was that they were now able to pass a “resolution of disapproval” on it or something, but had no power to actually block it anymore. Did that not happen?

So what happens when 30 or so Republicans vote yes instead of present during the vote? I just don’t get this. Holding the Debt Ceiling hostage didn’t really work out so well for Republicans or the country. How do you make an argument that you are being fiscally responsible when you risk (again) the the nation’s credit rating?

@feebog: Because you, as a crazy Republican House Member, know the media will spin the message to your benefit. That FoxNews will be screaming 24/7 how the Dems raised your taxes and wrecked the economy. That you know facts and truth hardly matter anymore.

Someone has eleventh dimensional chessed the Republicans into a corner and they don’t like it. Obama gets his way, the deficit hawks get there’s, all by do nothing. The Repugs have to lead and Pelosi is the one who steps up with a plan. What a bunch of idiots.

Republicans are seriously considering a Doomsday Plan if fiscal cliff talks collapse entirely. It’s quite simple: House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more: no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes

I am not seeing how this helps Republicans in any way. It still looks as though the taxes on upper income people still goes forward, and the House Republicans still end up agreeing with the Democrats on the middle class tax cuts.

Kicking the can down the road on the debt ceiling issue will still make the GOP look like clowns. And while this may get them some way to strong arm some more cuts, it will not get them a cut in the tax rates for the wealthy.

There will be no agreement in December. There may be one in January after the bush43 tax cuts end. I hope they just end and I will happily pay the extra money just to get NPR and the deficit scolds to shut the hell up.

This actually gives them some wiggle room to get something done before the end of the year.

BTW, if the Congress does not provide AMT relief as part of the deal, the taxes of up to 30 million taxpayers will go up in 2012. Not 2013. This would kill the Republicans even if Fox News and ignorant pundits tried to blame Obama for this.

The wealthy contributors who pay Republican campaign bills will be screaming when they start paying 39% rates in 2013. Republicans should be trying to negotiate smaller permanent tax increases on the wealthy, not talking tough. Once the current rates expire they aren’t ever coming back.

Hard to look at this and not see a bunch of dumbasses who think it’s still 2009-2010.

@Sterling: The bigger deal, and the one that will cause much more squaking, is the fact that the preferential treatment for capital gains also expires. The AOS will be getting lots of nasty phone calls about that one, but no way in Hades should that go up. There will be some estate tax rates restored to older levels as well. Poor Orange Julius.

Oh, and increase the tax on the top 2% to Reagan’s 50% on incomes above $250K, just to eff with them.

“You’ll take nothing and be grateful for it!”

If Obama actually was a progressive, he’d put something in there that raised taxes on the 2% above the Bush tax cut expiry as a condition for any deal, even if by a very small amount. Just to get a clear win and change the debate in the future.

The bigger deal, and the one that will cause much more squaking, is the fact that the preferential treatment for capital gains also expires.

Yep, capital gains and qualified dividends no longer get preferential treatment. I imagine that the Republicans are also trying to blunt the impact on the new 3.8 percent tax on net investment income that goes into effect for 2013, which will hit wealthy taxpayers more than anyone else.

There will be some estate tax rates restored to older levels as well. Poor Orange Julius.

The estate tax is still a mess. Here, doing nothing is a bad solution.

When we talk about $250,000, do we mean $250k in taxable or adjusted gross income?

We’re really talking about taxable income. But it’s hard for politicians and pundits to be clear about this.

If Obama actually was a progressive, he’d put something in there that raised taxes on the 2% above the Bush tax cut expiry as a condition for any deal, even if by a very small amount. Just to get a clear win and change the debate in the future.

This would never pass the House.

However, I think that Obama should have proposed this. Hell, maybe even a rate that was 5 percent above the Bush tax rates. This would give the GOP some face saving room to just let the Bush tax cuts expire and claim that they prevented the Democrats from taxing and spending even more than usual.

Dumb question — so a bill can pass the House with less than 218 votes? So just as long as there’s more “yeas” than “nays”, it passes automatically, regardless of whether that number represents a majority in the House?

I did not know this. Can a Senate bill pass 47-46 if 7 Sennys go “present” on a bill, too?

Dumb question—so a bill can pass the House with less than 218 votes? So just as long as there’s more “yeas” than “nays”, it passes automatically, regardless of whether that number represents a majority in the House?

It depends a little bit on whether there are rules attached the vote, although those kinds of rules are usually designed to skip procedural steps as long as a bill gets two-thirds passage. But yeah, standard procedure is that more yeas than nays means the question passes.

@Punchy: My understanding of it, though I could be partially wrong, is that for a bill to pass it needs a majority of the House or Senate to vote for it, but those that are not present are still included in the total for this purpose. So if 10 Senators are absent, you can’t just pass something with 45 votes – but you can if those same 10 Senators are there and simply vote “present”. If a seat is empty for whatever reason (someone retires or something), they are removed from the total in the same way a “present” vote would be.

We’ve got plenty of evidence they will light themselves on fire before they work with Obama or anything to do with him.

I haven’t seen any of them actually light themselves on fire yet, just a bunch of them waving gasoline and matches. I’m not going to believe them until the whole Republican caucus immolates itself live on pay-per-view- which sounds like a great way of raising money to pay down the debt, BTW.

RE: The estate tax is still a mess. Here, doing nothing is a bad solution.

Unless you’re an estate planning lawyer. For them, 2012 is going to pay to renovate the vacation houses they bought in 1981.

Hah. True enough.

BTW, I’m reading today that an outline plan that the White House offered to Boehner included the following:

… the president’s plan would raise $960 billion over 10 years by increasing the top two marginal tax rates, as well as rates on capital gains and dividends. Another $600 billion would be raised by capping deductions. The offer also reportedly includes setting estate taxation at 2009 levels and extending bonus depreciation. The proposal also calls for alternative minimum tax relief at a cost of $236 billion and an extension of payroll tax relief at $110 billion.

However, one House bill calls for the extension through 2013 of current law estate tax rules ($5 million (indexed) personal exemption and 35 percent top rate).

What a mess if Congress does nothing for a while, and then later significantly changes the the law here.

I still laugh hysterically at “I have a gub.” I think, on reflection, that the Monty python reference I was making may have been to the early part of the Doug and Dinsdale sketch.

Presenter: At the age of fifteen Doug and Dinsdale started attending the Ernest Pythagoras Primary School in Clerkenwell. When the Piranhas left school they were called up but were found by an Army Board to be too unstable even for National Service. Denied the opportunity to use their talents in the service of their country, they began to operate what they called ‘The Operation’… They would select a victim and then threaten to beat him up if he paid the so-called protection money. Four months later they started another operation which the called ‘The Other Operation’. In this racket they selected another victim and threatened not to beat him up if he didn’t pay them. One month later they hit upon ‘The Other Other Operation’. In this the victim was threatened that if he didn’t pay them, they would beat him up. This for the Piranha brothers was the turning point.

Apparently only 2% of small business owners make more than $250,000, after deductions, taxable.

Let’s say you’re one of that small group and you make $350,000 taxable a year. And your highest bracket tax rate goes up 3%. That means that your taxes go up $3,000. Now you have $250 less per month to spend. You’re making almost $30,000 per month before taxes and your after tax income drops $250.

Do you shut down your business because of the pain inflicted or do you think of some way to grow your business to replace that loss?

—

I’m of the opinion that we should tax rich people heavily.

If they did, in fact, earn their money via their own superior abilities then we should motivate them to keep producing for the greater good.

I believe that they think that they have no choice but to fight like crazy to impose their priorities. They fully realize now, after the election, that they have no spokesman, no policy, no identity but NO to taxes on the wealthy. If they lose that and some cuts on entitlements, they have no other national policy that hasn’t been completely repudiated. They would effectively disappear on the national policy arena and would have no place to go as far as what they would advocate for. These are people fighting to survive irrelevancy. They are dangerous because almost anything is better than just being invisible. Of course, my opinion is that this is when they must be forced exactly into irrelevancy and be made to disappear. But this will be ugly and rough…

If Obama actually was a progressive, he’d put something in there that raised taxes on the 2% above the Bush tax cut expiry as a condition for any deal, even if by a very small amount. Just to get a clear win and change the debate in the future.
__
But he isn’t, and he won’t.

When Pelosi passed the TARP, she refused to provide more Democratic House votes than would suffice to pass the bill if and only if a majority of Republican House members voted for it.

The Republicans didn’t believe the Democrats could or would hold to that, so the morning vote failed.

Hours later after much Wall Street panic and reportedly heated calls from big money types to whatever direct or indirect contacts to the Republicans brought them in line, and by the afternoon they passed it.

edit: The Powers That Be did indeed apply a lot of pressure on both Democrats and Republicans to get the bill to pass the second time. The bipartisanship was not so much demanded by Pelosi as genuinely required to get such an unpopular bill through.

The GOP have made a remarkably passive-aggressive counter-offer on the fiscal cliff:

Interesting that they call it a “status quo election”. As I see it, the House Republicans had negotiated with the President assuming they would unseat him. They didn’t, so while they retain the House, the status quo has changed. They’re trying to deny that elections have consequences.

I,m so old , I can remember when treason was a crime. Actually that wasn’t so many years ago, because I can remember being labeled a traitor because I opposed invading Iraq and not agreeing with the shrub was labeled as treason

I read a rather short summation of the entire mess, to wit –
‘are we a country that CAN”T afford the government programs that we use or are we a country that WON”T pay for the government pogams that we use?’.
I suspect the answer is the later.

“The Republican letter released today does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill. Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve. Independent analysts who have looked at plans like this one have concluded that middle class taxes will have to go up to pay for lower rates for millionaires and billionaires. While the President is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates. President Obama believes – and the American people agree – that the economy works best when it is grown from the middle out, not from the top down. Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won’t be able to achieve a significant, balanced approach to reduce our deficit our nation needs.”

Middle class tax cuts, pushed through by Obama, and passed by the Senate, get passed, and 98% of us DO GET TO KEEP OUR TAX CUTS. The article must be wrong.

Meanwhile, the Bush tax cuts for those over $250K go away. They now pay higher taxes. Defense gets cut deeply, which it needs, other austerity measures kick in, which sucks but we can try again to fix those in February.